PBOC Official Says U.S. Election Won’t Impact Yuan Level

China’s central bank governor said convertibility will be the next step in the overhaul of the
exchange-rate system as calls grow for the nation’s new leadership to deepen changes in the economy to sustain growth. Photographer: Andrew Harrer/Bloomberg

Nov. 6 (Bloomberg) -- The U.S. presidential election won’t
have an impact on the value of the yuan in foreign-exchange
markets, a Chinese central bank official said.

China has sole decision-making power on its exchange-rate
policy and the yuan’s appreciation against the dollar in recent
weeks has been driven by market demand, He Jianxiong, director-general of the People’s Bank of China’s international
department, said in an interview in Mexico City yesterday.

“Ultimately, it’s the market that determines the yuan
rate, and it is close to its equilibrium level,” He, formerly
an International Monetary Fund Executive Director for China,
said after the meeting of officials from the Group of 20. “The
U.S. election won’t have much impact on the yuan level. China
has a full power in making its own policy.”

Group of 20 finance chiefs pledged to move toward more
flexible currency regimes in a statement issued yesterday that
highlighted policy makers’ commitment to avoid competitive
devaluations as global growth sours. The G-20 refrained from
singling out China’s currency after it has risen 0.7 percent
versus the dollar in the past month, the third-best performance
among 25 most-actively traded emerging-market currencies. For
the past three months, the yuan has gained 2 percent.

Forwards Rate

Twelve-month non-deliverable yuan forwards are trading 1.9
percent lower than the spot rate in Shanghai after the discount
widened to 2 percent on Oct. 23, the biggest since 2009, on bets
the currency’s appreciation will reverse following this week’s
U.S. elections.